Jefferson County Debt Plan Is Costly

By

Kelly Nolan and

Katy Stech

June 17, 2013 8:34 p.m. ET

Escaping the largest U.S. municipal failure could leave Jefferson County, Ala., in an even deeper hole.

The county's plan to emerge from bankruptcy protection hinges in part on the sale of $1.9 billion of new debt this fall to refinance debt tied to its troubled sewer system. But some observers call terms of the new debt onerous.

The proposal for the refinancing, which has been approved by a majority of county commissioners,...